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In most purchasing departments, buyers are busy fulfilling orders. They attempt to get outside bids, better pricing and seek more vendor alternatives, but the hours in the day sometimes prohibit proper sourcing. In order for your purchasing department to follow up and do solid investigation on pricing and other possible discounts, it may pay to hire a procurement intern for the summer or for a semester of his school year. He will have the time and motivation to do comparative pricing when others in the department get led off track by daily deadlines. Here are a few things you might consider assigning to this temporary ‘money-maker’.
Potential tasks for a purchasing intern:
- Research Vendors: Research and list all of the possible suppliers for what your firm buys (i.e. steel vendors or suppliers, freight companies for transportation, chemicals, plastics, wood pallets, pet supplies). Have the intern make a list of every commodity vendor for your particular item, located within a 500-mile radius. You think you do but you probably do not know all of the players, nor do you have the time to do the grunt work. Your intern does. Have him compare your current list to those he finds in order to get new bids. Have him submit bids out to these new players to find cost savings.
- Bid out top items purchased: Have your intern send out a duplicate bid to five vendors for the exact same items and see who wins. Make sure the bids are identical so comparison is valid. Is the winning price cheaper than what you are paying now? Your cost savings most likely will pay for the cost of the intern or you may find a new alternative supplier.
- Research Customer Vendors: Arrange for the intern to work with sales personnel. Ask your company’s customers which vendors they use. Have him speak with their purchasing personnel to share cost data. This helps your customer. It helps you obtain cheaper pricing but more importantly strengthens your relationship with your customer. If he can save money on his purchases from your shared vendor, he will want to continue your relationship with you when you yield more cost savings for his company.
- Offer to buy from customers’ vendors: If you offer to buy from your customer’s vendors, you should tell him he needs to seek better prices from this vendor. Tell the shared vendor that both of your firms want better pricing than that currently offered. They will benefit through larger volumes so they need to yield on price because there are most likely other vendors which are likely to jump on this opportunity. The vendor will reluctantly agree.
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